Through stock ownership plans, stockholders receive employee benefits.
Research suggests that companies that acquire many businesses over time become
expert in this process and so can generate significant value from their acquisitions.
Together with an analysis of the company’s external environment, internal analysis
gives managers the information they need to choose the business model and strategies
that will enable their company to attain a sustained competitive advantage.
If a company’s core skills are highly specialized and have few applications outside the
core business, then a company should pursue a related diversification strategy.
The goal for companies in the growth stage of the industry life cycle is to maintain its
relative competitive position in a rapidly expanding market.
Well-constructed goals provide a means by which the performance of managers can be
evaluated.
At the level of organizational structure, control, and culture, ____ has given strategic
managers many new options in implementing strategies.
A.research and development
B.marketing research
C.outsourcing
D.benchmarking
E.information technology
The role played by infrastructure leadership in implementing reliability methodologies
includes all BUT which of the following?
A.Providing leadership and commitment quality
B.Finding ways to manage quality
C.Setting goals and creating incentives
D.Soliciting input from employees
E.Creating a command-and-control structure
Kim’s T-shirt factory was expert at providing unique and high-quality but costly shirts.
Even though the designs were very nice and the amount of detail increased over time,
the high price meant that few customers bought shirts from her and her factory went
bankrupt. Kim’s factory failed due to
A.inertia.
B.prior strategic commitments.
C.the Icarus paradox.
D.lack of distinctive competencies.
E.lack of capabilities.
As the supermarket industry began to grow with the opening hundreds of new stores,
supermarkets were able to
A.capture economies of scale not previously available.
B.monopolize new markets.
C.increase costs and reduce profitability.
D.buy from vendors in smaller quantities.
E.all of these.
Firms sometimes pursue a chaining strategy to
A.obtain the advantages of cost leadership.
B.create product diversity.
C.retain current market share.
D.spread overhead costs.
E.establish a number of unrelated business units.
When a company performs a value creation activity in the optimal location for that
activity, wherever in the world that might be, it is trying to capitalize on
A.economies of scale.
B.economies of scope.
C.the transnational strategy.
D.location economies.
E.its localization strategy.
Acquisitions often fail because of
A.poor commercialization.
B.too much preacquisition screening, which increases the time it takes to enter a
market.
C.large-scale entry.
D.differences in corporate culture.
E.slowness in establishing significant market presence.
Switching costs may arise when
A.changing from one computer system to another.
B.substitute products are available at a lower unit cost.
C.when there are a large number of interchangeable products.
D.products are commodity-like in nature.
E.all of these.
Pay for performance tends to
A.increase per-unit costs.
B.decrease employee output.
C.increase employee output.
D.have little effect on employee output.
E.be used only for individual workers, not for teams.
Philip Morris capitalized on the growing health consciousness trend when it acquired
Miller Brewing Company, and then redefined competition in the beer industry with its
introduction of low-calorie beer (Miller Lite). This health trend represents a
_____force.
A.social
B.political
C.legal
D.technological
E.demographic
In applying agency theory to problems of corporate management, the principals are the
A.employees.
B.CEO.
C.top management team.
D.CEO and the top management team.
E.stockholders.
Which of the following statements concerning research and development is correct?
A.Exploratory research is more important than development research.
B.Development research is more important than exploratory research.
C.Exploratory research is directed toward commercialization of a new technology.
D.Development research advances basic science.
E.Companies with a strong record of internal new venturing excel at both types of
research.
Mature industries are generally characterized by
A.low entry barriers.
B.few economies of scale.
C.high transportation costs.
D.a small number of large firms.
E.rapidly fluctuating demand.
Attaining a credible commitment from a potential partner
A.is a step in partner selection.
B.requires the ability to share skills with partners.
C.requires the ability to learn from alliance partners.
D.is a way to minimize opportunism.
E.requires the ability to share skills with and learn from alliance partners.
The principal dangers of a cost leadership approach include all of the following except
A.powerful buyers.
B.technological change.
C.imitation of production techniques.
D.changes in consumer tastes.
E.rivals lowering their costs.
Leveraging competencies involves taking a distinctive competency developed by a
business unit in one industry to create
A.a new business unit in the same industry.
B.a new business unit in a different industry.
C.a new industry.
D.a new market segment.
E.new customers in the same industry.
Which of the following governance mechanisms is regarded as the option of last resort?
A.Strategic control system
B.Takeover
C.Board of directors
D.Stock-based compensation system
E.Financial statements and auditors
The degree to which a company specifies how decisions are to be made so that
employees’ behavior becomes predictable is referred to as
A.uniformity of output.
B.conformity of behavior.
C.standardization.
D.maximization of effort.
E.behavioral control.
Mohawk Industries Inc. is the largest designer, maker, and seller of carpets in the
United States. In a separate division, the firm’s product line also includes floor tile,
pillows, and bed linens. Mohawk has a strong emphasis on cost reduction. If the firm
wishes to sell more products overseas, what strategy would you recommend, and why?
Consider the macroenvironment facing a large, international airline headquartered in
the United States (such as American or United). Give at least three examples of
important trends or events from each of the five segments of the airline’s
macroenvironment (macroeconomic, technological, demographic, social, political, and
legal), and explain whether each represents a threat or an opportunity for the firm.
Students don’t need to conduct research to answer this question; they should be able to
answer from their own understanding and general knowledge. Examples of the types of
answers they should write are given below.
Identify and discuss the criticisms of the traditional strategic planning process and why
it is useful to view strategy as an emergent process.
Illustrate the main components of strategic planning process in a visual diagram.